Rising interest rates have wreaked havoc this year, driving the cost of everything up. Fortunately, there is some solace to safeguarding your wealth, thanks to these five stellar investments.
Buy a defensive stock
Every portfolio needs a defensive core, and that’s why the first stock for safeguarding your wealth is Fortis (TSX: FTS).
Fortis is one of the largest utilities in North America. The utility boasts operating regions across the U.S., Canada, and the Caribbean. Those facilities generate a recurring source of revenue that is backed by long-term regulated contracts.
Fortis generates a recession-resistant revenue stream that allows it to pay out a generous dividend and invest in growth.
That dividend currently works out to 3.93%. Prospective investors should also note that Fortis has provided an annual uptick to that dividend for 49 consecutive years.
Invest in a telecom
Another defensive option that provides a juicy income for safeguarding your wealth comes from Canada’s telecoms. Specifically, I’m referring to Telus (TSX: T).
Telus offers investors a growing dividend backed by a trusted subscription-based business. That dividend is currently boasting an appetizing 6.11% yield, making it one of the better-paying options on the market.
Part of the reason for that swelled dividend is that Telus has dipped 14% over the trailing 12 months. Some of that dip is attributed to the overall market volatility, but another factor is two of Telus’ peers merging earlier this year.
Prospective investors should note that Telus is a long-term play. If anything, investors should see the drop as an opportunity to buy a long-term holding at a discount. Telus has also provided bumps to its dividend for over a decade.
Consider a big bank
I would be remiss if I didn’t mention one of Canada’s big banks for safeguarding your wealth. The big banks offer a juicy income, run a reliable domestic business in Canada, and continue to show strong growth abroad.
The bank for investors to consider buying at this time is Bank of Montreal (TSX: BMO). BMO is the oldest of the big banks and has provided investors with nearly two centuries of dividend payments without fail.
Today that yield is a respectable 4.80%. And just like the other stocks mentioned above, BMO also provides an annual uptick to that dividend.
Investors should also note that BMO is a great growth option, too. Earlier this year BMO completed the acquisition of California-based Bank of the West. The deal bolstered BMO’s presence in the U.S. market to 32 states.
Ditch the rental
Rising interest rates have pushed mortgage rates into the stratosphere. As such, many would-be landlords are priced out of the market. Fortunately, there’s another option to consider, RioCan Real Estate (TSX: REI.UN).
RioCan is one of the largest REITs in Canada, with a growing portfolio of mixed-use residential properties. Those properties are situated in major metro areas on high-demand transit corridors. In other words, they cater to the shortage of housing and provide sufficient retail traffic.
RioCan offers investors a juicy monthly distribution, much like a landlord’s rent. As of the time of writing, that distribution works out to a yield of 5.40%.
Keep in mind that the distribution is a lower-risk option than a single property. It also removes the complexity of collecting rent and finding tenants.
The retailer that thrives in downturns
Dollarama (TSX: DOL) rounds out the list of stocks for safeguarding your wealth. Dollarama is the largest dollar store in Canada, with a network of over 1,500 stores. The company also boasts a growing presence in Latin America through its Dollar City brand.
Dollar stores are incredibly defensive investments. During downturns, shoppers will trade down to stores such as Dollarama. This is where Dollarama’s unique business model, which includes fixed price points and lower-priced bundling provides a sense of value to shoppers.
The result is a hard-to-resist retailer that thrives during times of volatility, continuing to post strong growth numbers with each passing quarter. This makes DOL stock a unique option that has surged and is very hard to ignore.
Safeguarding your wealth can be done
No stock is without risk. That’s why it’s important to diversify your portfolio, and in my opinion, the five stocks mentioned above are great options to help do exactly that.
